The FTSE suffered again yesterday as we sold off from the open to post a low of 6050. We did try to recover finding intra day resistance at 6117. We then had another visit to the days lows but were unable to attack our longer term support at 6019. So we now have some tighter lines in the sand to trigger todays move. A breach of 6050 would almost guarantee a test of the major support but a break of 6117 would suggest some reprieve for the Bulls with 6175.5 as the first objective.
Indicators in Play
Fibonacci introduced his sequence of numbers to mathematics back in the 1200’s. These numbers appear in all walks of life but have an eerie influence on trading. We use the 38.2 level as an indication of the strength of the correction or indeed if the longer-term trend has changed contact.
Day traders often go down through the time frames to find intra day resistance and support that do not show up on their daily charts. This can give good entry levels to add to a position or warn that the picture is changing.
Summary
Technicians are not supposed to pre-empt moves but also being a trader, gut feel pops into the frame now and then. With this in mind we will be watching for a breach of 6117 for a long awaited bounce. We are not getting all Bullish here but do feel that we could have done enough for the moment.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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